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Auditing Essay

494 words - 2 pages


1. A limitation of an audit is caused by:

a. The nature of financial reporting.

b. The nature of audit procedures

c. The need for the audit to be conducted within a reasonable period of time and at a reasonable cost

d. All of the above

2. Which of the following is NOT true about Corporate Social Responsibility assurance?

a. Reporting is voluntary and is becoming more widespread.

b. Includes both financial and non-financial information.

c. Is required to be performed by an auditor.

d. Disclosures include environmental, employee and social reporting

3. Auditor independence is:

a. Defined as acting with integrity, objectivity and professional scepticism.

b. Essential when complying with the ethical ...view middle of the document...

The rules, systems and processes within companies used to guide and control them

c. An intentional act through the use of deception to obtain an unjust or illegal advantage

d. The processes used by a client when finalising the accounts for an accounting period

6. Which of the following statements is correct about audit risk?

a. It is impossible to completely eliminate audit risk.

b. Audit risk is the risk that an auditor expresses an inappropriate opinion when a financial report is materially stated

c. Audit risk can be reduced at the planning stage of an audit by identifying the key risks faced by the client

d. All of the above

7. If there is a risk that management's assertion that recorded inventory exists is not valid, the auditor will:

a. Spend more time testing for the existence of recorded inventory

b. Spend less time testing for the existence of recorded inventory

c. Spend more time testing for the completeness of inventory

d. Not adjust their audit strategy

8. Completeness is an assertion used:

a. When testing balance sheet items

b. For transactions and events

c. For presentation and disclosure

d. All of the above

9. When an auditor uses the work of an expert, who has the responsibility for arriving at an overall conclusion regarding the truth and fairness of a client's financial report?

a. The auditor

b. The expert

c. The client's management

d. The client's audit committee

10. Sampling is not required when:

a. It is the first year that the auditor has done the audit for a client

b. The auditor is conducting tests of controls

c. An audit procedure is conducted on an entire group of transactions

d. The client requests the auditor not to collect samples of certain transactions

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